Post Utme Rhema University 2020 Economics Question 16

Practice objective / multiple choice question 16 from the 2020 Post Utme Rhema University Economics examination.

Post Utme Rhema University 2020 Economics Objective / Multiple Choice
Question 16 POST_UTME_RHEMA_UNIVERSITY • 2020 • ECONOMICS • objective

The Marshall-Lerner condition states that a country's balance of payments will improve if the sum of the percentage changes in its export and import prices exceeds the percentage change in its exchange rate. Which of the following scenarios would lead to an improvement in the balance of payments?

Answer Options

Correct Answer A. A 10% increase in export prices and a 5% decrease in import prices
B. A 5% decrease in export prices and a 10% increase in import prices
C. A 10% increase in export prices and a 10% increase in import prices
D. A 5% decrease in export prices and a 5% decrease in import prices
Correct Answer
A
Correct Option:
A 10% increase in export prices and a 5% decrease in import prices

About This Question

This is Post Utme Rhema University 2020 Economics Question 16. It is one of the objective questions from the 2020 Post Utme Rhema University Economics examination.

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